Amusing picture, via John Hussman:


Category: Credit, Derivatives, Mathematics, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Subprime Debt Values in a Recession”

  1. red95king says:

    Did you know Einstein wasn’t all that great in math (reletively speaking lol).

    Einstein had a lot of help from his mathematician friend Marcel Grossmann.

  2. bt says:

    Einstein was referring to German subprime, so it won’t matter here. That is how permabulls would rationalize it :-)

  3. Ross says:

    Actually the formula expressed on the chalk board is approximately what was actually done!

  4. Stormrunner says:

    Einstein’s miracle of compound interest working both sides of the equation, the up as well as the down.

  5. Francois says:

    V = 0 ?

    Lucky cookies!

    Imagine if V < 0? Ouch!

  6. Rich Lather says:

    There’s also one for church signs.

  7. DavidB says:

    Oh come on. It doesn’t take a genius to figure THAT out!


  8. Bob Misko says:

    The underlying asset will always determine the value of the financial instrument. Even if the house falls down, the land is worth something. My guess is $.25 – $.30 on the dollar as a ballpark to the loan value. Wait a couple of years (2010) and walk into your local bank. By that time they will realize the “value” of these properties and be happy to talk to you.
    Happy investing.